The European Union’s Ship Recycling Regulation (SRR) was supposed to be a game-changer for the maritime industry, pushing for safer and more environmentally friendly practices. But as a new evaluation reveals, some shipowners are playing a dangerous game of flag-hopping to dodge regulations, putting workers and the planet at risk.

The EU’s Ambitious Ship Recycling Regulation: Progress and Pitfalls

Since its introduction in 2018, the EU Ship Recycling Regulation has made significant strides in promoting global standards, including the upcoming Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, set to take effect in June 2025. The SRR requires EU-flagged vessels to be dismantled at approved facilities on the European List, which currently includes 43 yards across Europe, Türkiye, and the United States.

However, the European Commission’s latest evaluation, released in February 2025, paints a mixed picture. While the regulation has driven progress, it’s being actively undermined by shipowners who exploit loopholes to avoid compliance.

The Flag-Hopping Scandal: A Race to the Bottom

The biggest obstacle to the SRR’s success? Flag-hopping. Shipowners are switching their vessels to non-EU flags just before recycling, allowing them to sell end-of-life ships to cash buyers at higher steel prices. These buyers then dismantle the ships in South Asian yards, where conditions often fall far short of EU standards.

According to the NGO Shipbreaking Platform, a staggering 80% of global vessel tonnage scrapped in 2024—255 out of 409 ships—was dismantled under unsafe conditions on the beaches of Bangladesh, India, and Pakistan. China topped the list as the “worst dumper,” selling over 50 ships for scrapping in Bangladesh alone.

The problem isn’t new. In 2023, 85% of the 446 oceangoing vessels dismantled globally met their end on South Asian beaches. These practices have led to calls for the EU to revise the SRR and extend its reach beyond flag states to include ownership.

Hazardous Materials: A Missing Link in Ship Recycling

Another major issue highlighted by the European Commission is the lack of reliable hazardous materials inventories during a ship’s operational life. These inventories are critical for ensuring safe dismantling, yet 45% of EU-inspected ships failed to comply with SRR requirements. Many vessels lacked a hazardous materials inventory altogether, leaving recyclers in the dark about the dangers they face.

What’s Next for the EU’s Ship Recycling Efforts?

To combat flag-hopping and other challenges, the European Commission is exploring innovative solutions. One proposal is the introduction of a ship recycling license, designed to bridge the price gap between EU-listed yards and cheaper, less regulated facilities. Another potential step is shifting compliance responsibility from the registered owner to the beneficial owner, making it harder for companies to evade regulations by changing flags.

The stakes are high. Without decisive action, the EU’s vision of a greener, safer maritime industry could be sunk by bad actors.